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Foreign-Trade Zones
May 2009 Issue
Enacted in 1934, the Foreign-Trade Zone Act (FTZA) was established to “…expedite and encourage foreign trade” with the goal of increasing global competitiveness by eliminating disincentives associated with U.S. trade tariffs during the 1930s. The FTZ program has since grown to include 250 General Purpose Zones and 450 Sub-zones. The Development Corporation (TDC) currently administers five sites on behalf of Clinton County, which are designated as FTZ #54.
While the FTZ program has been underutilized recently on a national level, Clinton County has employed it as a key driver to help attract foreign companies to the region. Clinton County’s FTZs are good micro-level indicators of the strength and economic health of the region’s bi-lateral trade partnership with Canada. In fact, World Warehouse located in Champlain, New York has been cited as the most “active” FTZ in the entire U.S.
Qualified FTZ companies are eligible for a myriad of benefits aimed at mitigating some of the costs associated with international trade. Duty Free, Duty Deferral, streamlined Customs procedures and tax exemptions on foreign/domestic goods held for export, are just some of the benefits a company located in an FTZ can take advantage of.
In an effort to streamline the Foreign-Trade Zone (FTZ) program and create a more user-friendly environment, the federal government recently introduced a new application for expansion and reorganization of current zones titled the “New Alternative Site Framework” or NASF. The NASF strategy is intended to result in a more flexible use of the FTZ program for grantees and businesses alike. NASF guidelines allow communities to better define their service area, reorganize current Magnet sites and designate new ones. Usage-Driven sites can be designed to meet a certain operator’s specific needs.
The Clinton County Legislature has authorized TDC to begin the NASF application process and re-designate portions of FTZ #54 to maximize the program’s effectiveness as an economic development tool. Increasing the accessibility of the FTZ program for businesses will surely benefit the region’s economy and promote enhanced foreign trade for the county.
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